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Hickenlooper budget proposes more money for education, state workers

By Tim Hoover The Denver Post

Posted:
11/01/2012 07:50:36 PM MDT

Updated:
11/01/2012 07:51:10 PM MDT

In the richest spending plan presented since before the Great Recession began, Gov. John Hickenlooper on Thursday proposed a 2013-14 state budget that would give state employees raises, add more money to schools and colleges and still give seniors a property tax break.

Under the $21.9 billion budget recommended by Hickenlooper, a Democrat elected in 2010, total spending would increase by 5.4 percent over the current, 2012-13 fiscal year, which ends in June. In total dollars, the biggest increases would come in spending for health care, which would see an 8.6 percent increase, or $475.6 million. Forty percent of that spending increase, however, is in federal funds.

That's partly because Medicaid, the state and federally funded program, would add some 51,000 new clients to its rolls, taking the total number of enrollees to more than 700,000 -- yet another record high.

Still, other areas of the budget -- such as K-12 education and colleges and universities -- also would see new money after years of cuts, level funding or relatively small increases.

The spending plan Hickenlooper is proposing, which now goes to the Legislature's powerful Joint Budget Committee, represents the brightest budget outlook in years.

"This is really the first time where we feel like since the end of the Great Recession, budget cutbacks have not been the dominant theme," said Henry Sobanet, Hickenlooper's budget director.

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But Sobanet explicitly cautioned that there could be trouble on the horizon. Potential economic crises in Europe and the prospect of automatic, deep cuts in federal spending if Congress can't come to an agreement on debt reduction could throw the national economy, and Colorado's, into another tailspin.

Boulder Valley School District Superintendent Bruce Messinger called the proposed budget "good news for schools." The governor's proposal includes both a cost-of-living increase and, if enrollment increases, money for the additional students.

"It's been a number of years since we've seen both of those," Messinger said.

For the current school year, districts received money for enrollment growth, but not cost-of-living increases. The governor's proposal doesn't, however, come close to the level of funding that would have been required under Amendment 23.

Highlights from Hickenlooper's recommended budget include:

Increasing total spending for K-12 education by $213 million, or a 4.8 percent increase. It would represent a $195 per-pupil increase over the current year.

Hiking total spending for higher education by $68.3 million, or 2.3 percent. The governor's proposal, however, still allows colleges to increase tuition by 9 percent.

Give state employees, who have gone four years without a raise, a 1.5 percent pay increase, at a cost of $57.8 million. The governor, though, proposes that state employees split the cost of increases in health, life and dental and insurance costs.

Spending $2 million on a tourism campaign to give Colorado a "unified branding platform."

Allocating $600,000 on efforts to retain existing companies in Colorado.

Spending $17 million, 90 percent of which is federal funds, on replacing an antiquated computer system that helps administer the state's Medicaid system. This is a different computer system than the notorious, trouble-plagued CBMS system the state has spent hundreds of millions of dollars on.

The governor in the 2012 legislative session proposed suspending the Senior Homestead Exemption, a property tax break for those 65 and older which costs the state about $100 million a year. That prompted a showdown with the Republican-controlled state House, which opposed suspending the break again.

Ultimately, the fight never was never had, because later revenue forecasts showed revenues had improved and there was enough money to fund the program without cutting other programs.

For the 2013-14 year, however, the governor is not proposing any suspension of the tax break. Sobanet said that while the governor's preference in the long term is to reform the tax break, which has no means test, "in light of the returning revenue and in light of the harsh lines in the sand" over the tax break, Hickenlooper isn't proposing a major change to the exemption in the budget.

Though the governor's budget outlines a $21.9 billion budget, that number includes more than $1 billion in double-counted funds, so the actual amount of dollars available to spend is less.

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